Fraud Accusations In Mulkey Case Become Talk Of N.C. Town

Sept. 24--DUNN -- The allegations of fraud that have surfaced after a prominent Fayetteville businessman's suicide have shocked residents in the Harnett County town where he made his first fortune.

Raymond Lee Mulkey Jr. was known by friends and acquaintances as a skilled salesman with deep pockets and a generous heart. Now some of his creditors are accusing him of bilking investors, businesses and banks out of millions of dollars.

Mulkey, 63, killed himself last month in North Myrtle Beach, S.C., leaving behind more than $40 million in unpaid debts and an estate worth only $8 million.

Numerous investors put their money into Mulkey's companies and earned 12 percent annual interest payments, but the principal appears to be gone, according to lawyers.

Dunn-based New Century Bank, which Mulkey helped establish 10 years ago, expects to write off up to $11 million as the result of apparent fraud, while other banks are claiming they're owed hundreds of thousands of dollars.

Mixed reactions

The revelations have stunned many in Dunn, Mulkey's adopted hometown.

"That just doesn't sound like Ray," said Johnny Simpson, owner of Simpson Paint and Decoration Center.

Simpson's shop in downtown is adjacent to Mulkey's insurance and real estate offices, which sit in the shadow of New Century Bank's headquarters on West Cumberland Street.

Simpson, like many in the town of about 10,000 people, said he has closely followed reports in recent days about Mulkey's death and the financial mess left behind. Simpson knew Mulkey for more than 35 years and saw him only weeks before he died, he said. Simpson dismisses talk of possible fraud as speculation.

"I have nothing but the highest regard for Ray, and I'm sorry that it ends this way for him," Simpson said. "Everybody gets into a situation sometimes that they can't handle, and I think that's what happened."

Others in the Harnett County town where Mulkey raised his children were less forgiving.

Stan Coleman and a few of his friends discussed Mulkey outside the Broad Street Deli & Market on Thursday.

"I didn't know Ray, but I knew of him," Coleman said. "Everyone in this town did. I can't believe he was living like this."

In the deli, three local businessmen discussed Mulkey's financial records, his former leadership role at New Century Bank and his reputation as a pillar in the community. A waitress at the diner said Mulkey is all she's heard about the past few days.

"It's really the talk of the town," she said.

One Harnett County lawyer said he's tired of hearing about it. He was close with Mulkey before the businessman shifted his primary financial focus to Fayetteville several years ago.

"I don't understand what the hell happened to Ray," said the lawyer, who spoke on the condition he not be identified. "The man was able to get bank financing better than anybody I have ever seen, I know that. I don't know what he did with all that money."

The lawyer said he never knew Mulkey to cheat anyone.

"I sort of lost contact with Ray over the past 15 years," the lawyer said. "He got to the point where he loved money more than anything else. It's a shame for it to end like this for him and his family."

Civil probes

Mulkey destroyed many of his financial records before his death, according to Lonnie Player Jr., a Fayetteville lawyer representing seven people who claim to have lost hundreds of thousands of dollars. It could take years to settle the estate, Player said.

Mulkey owned and operated more than 50 premium finance companies, most of which were variations of the name N.C. Premium Finance. Premium financing is a service that loans funds to help people cover insurance premiums.

Player said his clients invested on the promise of annual 12 percent interest payments, but the investors were never repaid on principal.

Player and at least two other lawyers have launched civil investigations and plan to file lawsuits.

So far, no state or federal law enforcement agency has announced an official probe into Mulkey's affairs.

The state Department of Insurance is auditing Mulkey's insurance business after the estate administrator contacted the agency about the debts.

Staff writer Mike Hixenbaugh can be reached at [email protected] or (910) 486-3511.

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